If the shut-down rule, p < AVC, is the same in the short run and the long run, explain why the shut-down prices may be different
What will be an ideal response?
In the long run all costs are variable. In the long run, the average variable cost is usually higher than in the short run.
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In an economy where firms in most industries are purely competitive firms, individual firms in each industry would produce ________ products and have a ________ share of industry output
A) differentiated; large B) differentiated; small C) standardized; large D) standardized; small
Which function of money allows for specialization to take place?
A) medium of exchange B) unit of account C) store of value D) standard of deferred payment
A buyer's response to a change in income is an example of a "change in demand."
a. True b. False Indicate whether the statement is true or false
The total cost of the firm
A) includes explicit costs but excludes implicit costs. B) includes implicit costs but excludes explicit costs. C) includes implicit and explicit costs. D) includes implicit and explicit costs but excludes a normal rate of return on investment.